The bounce in US tech comes after a weak week for domestic IT counters, with Nifty IT stocks declining 4% to 8%, led by losses in Infosys, Wipro and TCS. The decline mirrored a broader rout in US software shares after Anthropic introduced a new legal briefs AI tool, which contributed to the sharpest fall in the software index since March 2020. ADRs of Wipro and Infosys fell close to 8% to 9%.
Anthropic recently expanded its enterprise AI platform, Claude Cowork, with 11 new plugins aimed at automating professional workflows across legal, sales, marketing and data analytics functions. The no-code, agentic AI assistant is designed for corporate users to automate tasks without writing software. Its latest addition, the Claude Legal agent, can carry out routine legal processes such as document and contract review and compliance checks, heightening concerns about disruption across multiple service-driven industries.
Market participants have increasingly flagged the risk that AI could alter the competitive landscape for software and IT services companies by compressing margins and weakening long-standing business moats.
Thomas Shipp, Head of Equity Research at LPL Financial, said fears centre around rising competition, pricing pressure and wider uncertainty over future growth trajectories, making valuations harder to assess.
Industries once considered relatively insulated from AI, including legal services, data analytics and customer support, are now seen as vulnerable to automation, posing structural challenges to the IT services ecosystem.
Jefferies characterised the market reaction as a “SaaSpocalypse”, citing a rapid shift in sentiment from viewing AI as an enabler to a potential replacement for software companies. Jeffrey Favuzza from the brokerage’s equity trading desk described trading behaviour as “get me out” style selling, reflecting heightened panic among investors, according to Bloomberg.Sensex, Nifty today: Catch all the LIVE stock market action here
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